Business Energy Glossary
What is SECR (Streamlined Energy and Carbon Reporting)?
SECR, the Streamlined Energy and Carbon Reporting framework, is a UK mandatory reporting requirement introduced in April 2019. It requires qualifying large companies and limited liability partnerships (LLPs) to disclose annual energy use, associated greenhouse gas emissions, and energy efficiency action taken during the reporting period. SECR replaced the earlier Carbon Reduction Commitment (CRC) energy efficiency scheme and is built into the Companies Act 2006 disclosure regime.
SECR affects thousands of UK businesses each year. Qualifying companies must include the SECR disclosure in their annual Directors Report alongside the financial statements. Non-compliance is a corporate governance failure with potential consequences from Companies House and the FRC. Understanding the threshold criteria, the data requirements, and the reporting format is essential for any business in scope.
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Who has to comply with SECR
SECR applies to:
- Quoted companies. Companies listed on the main market of the London Stock Exchange, the AIM market, or an equivalent EU market. All quoted companies regardless of size are within scope.
- Large unquoted companies. Unquoted companies meeting two of three criteria: more than 250 employees, turnover above £36 million, or balance sheet total above £18 million.
- Large limited liability partnerships (LLPs). LLPs meeting the same large company criteria.
“Low energy users” (annual UK energy consumption below 40 MWh) are exempt from the detailed SECR disclosure requirement, though they must still confirm their low energy user status in the Directors Report.
SECR disclosure requirements
A SECR disclosure included in the Directors Report must contain:
- Annual UK energy use in kWh, covering electricity, gas, and transport fuels.
- Associated greenhouse gas emissions in tonnes of CO2 equivalent (tCO2e), separated into Scope 1, Scope 2, and (for the largest companies) Scope 3 transport.
- At least one intensity ratio relating emissions to a business activity metric (e.g., tonnes CO2e per million pounds turnover, per square metre, per unit produced).
- Energy efficiency action taken during the reporting period.
- Methodology used for the calculation, including any assumptions, exclusions, or estimates.
- Comparison with prior year data for context.
Energy data to be reported
The scope of energy use covered:
- Electricity. Total UK consumption in kWh, including any on-site generation consumed.
- Gas. Total UK natural gas consumption in kWh.
- Transport fuels. For employees travel in company vehicles (Scope 1) and, for the largest reporters, employee business travel in non-company vehicles (Scope 3).
For unquoted companies, the SECR requirement is limited to UK operations. For quoted companies, global energy use must be disclosed with separate UK breakdown.
Emissions calculation
Emissions are calculated using government-published emission factors, updated annually by DESNZ. The standard categories:
- Scope 1 (direct emissions). From gas combustion, company vehicle fuel use, and any other on-site fuel combustion.
- Scope 2 (indirect emissions from purchased electricity). From electricity consumption, calculated using the average UK grid emission factor.
- Scope 3 (transport). For quoted companies, employee business travel in non-company vehicles. Other Scope 3 categories are optional under SECR but increasingly disclosed under other frameworks (CDP, Science Based Targets).
For market-based Scope 2 calculation (using supplier-specific carbon factors including any green tariff benefits), SECR allows but does not require disclosure. Best practice reports both location-based and market-based figures.
Energy efficiency action
SECR requires disclosure of energy efficiency action taken during the reporting period. There is no minimum requirement; the disclosure is narrative. Common examples:
- LED lighting upgrades.
- Heating, ventilation, and air conditioning (HVAC) optimisation.
- Building management system (BMS) improvements.
- Variable speed drives on motors.
- On-site solar PV installation.
- Process changes reducing energy intensity.
- Behavioural change programmes.
- EV fleet transition.
The disclosure should be specific (what was done, where) rather than generic. Vague disclosures attract Companies House scrutiny.
Reporting format and submission
SECR disclosures are included in the Directors Report section of the Annual Report and Accounts. The Report is filed with Companies House under the standard corporate filing timeline (typically within 9 months of year-end for private companies, 6 months for public).
The Financial Reporting Council (FRC) provides guidance on SECR disclosure quality. Companies producing thin or non-compliant disclosures may receive feedback through the FRC review programme.
For multi-entity groups, SECR can be disclosed at parent level covering all subsidiaries, or at individual entity level. Most groups consolidate at parent level for simplicity.
SECR (Streamlined Energy and Carbon Reporting) FAQs
What is SECR?
Streamlined Energy and Carbon Reporting: a UK mandatory reporting requirement under the Companies Act 2006, requiring qualifying large companies and LLPs to disclose annual energy use, carbon emissions, and energy efficiency action in their Directors Report.
When did SECR start?
Introduced in April 2019, replacing the earlier Carbon Reduction Commitment (CRC). First reports were for accounting periods starting on or after 1 April 2019.
Who has to comply with SECR?
All quoted companies, large unquoted companies (meeting two of: 250+ employees, £36m+ turnover, £18m+ balance sheet total), and large LLPs. Low energy users (under 40 MWh annual UK consumption) are exempt from detailed disclosure but must confirm their status.
What data does SECR require?
Annual UK energy use (kWh), greenhouse gas emissions (tCO2e in Scope 1, 2, and quoted-company Scope 3 transport), at least one intensity ratio, energy efficiency action taken, methodology used, and prior-year comparison.
What is the difference between SECR and ESOS?
SECR is an annual reporting requirement in the Directors Report covering energy and emissions. ESOS is a four-yearly energy audit requirement separately mandated for large undertakings. Different qualifying thresholds and requirements but they often apply to the same companies.
Do I need to include market-based Scope 2 emissions in SECR?
SECR requires location-based Scope 2 (using average UK grid emission factor). Market-based Scope 2 (incorporating green tariffs and PPAs) is permitted but not required. Best practice reports both.
What is a SECR intensity ratio?
A metric relating emissions to a business activity figure: tonnes CO2e per million pounds turnover, per square metre of floor area, per unit produced, etc. SECR requires at least one. The ratio supports comparison over time and between organisations of different sizes.
What happens if my company does not comply with SECR?
SECR non-compliance is a corporate governance failure. Companies House may flag the missing disclosure. The Financial Reporting Council (FRC) reviews disclosure quality and may seek explanations from non-compliant or weak disclosures. Reputational and regulatory consequences follow.